Building Philippine SMEs Resilience to Natural Disaster Why do we care ? What is SME resilience ? What it means for Philippine SMEs ? 1 Philippine Institute for Development Studies Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas Marife Ballesteros and Sonny Domingo Research Fellows

Resilience is “the ability to resist, absorb, and recover from the effects of a hazard in a timely and efficient manner” UN International Strategy for Disaster Reduction

Why SME Resilience to Natural Disaster Matters  APEC member countries collectively are prone to intense natural disasters  Disasters are bad for business; SMEs are mainly affected with high probability of failures  SMEs are the engines of growth and employment in many parts of Asia  SMEs failures can disrupt the entire supply chain. SME resilience means a resilient supply chain

*Raw Material *Parts *Manufacture *Dealer *Market *Consumer *Customer SUPPLY CHAIN Organization Org *Railroad *Shipping *Truck Communication infrastructure/Information technology

Elements of Supply Chain Resilience The effort of one individual/organization is not enough. Relationship and cooperation became important strategies for the organization for survival Building climate proof infrastructure Continuous availability of IT systems and data Foster both planned and adaptive resilience capabilities “People” side of business is important. Resilient supply chain begins with resilient citizens and employees

Developments in Philippine DRRM  Well developed policy framework and action plans for DRRM ₋Philippine DRRM Act of 2010 ; National NRRDM Plan ₋Climate Change Act of 2009 ; National CC Action Plan ₋People’s Survival Fund of 2011  Provision of Policy Framework for SME promotion and development ₋Magna carta for SME ₋Barangay Micro Business Enterprises Act ₋MSME Development Action Plan ( )

Developments in Philippine DRRM …….. (2)  Area BCM (on pilot stage in CALA and Metro Manila area) ₋Framework for the direction of action of an industrial agglomerated area ₋By the Local authority / central government authority/ management organization of Industrial Estates  Albay Public Safety and emergency Management Office (APSECO) ₋local initiative of Area BCP ₋Cover households and local businesses ₋Encourage local businesses to develop contingency/continuity plan ₋Applies vulnerability and hazard maps to land use zoning

Developments in the Philippine DRRM…..(3)  Project Noah ₋public private sector partnership targeted to flood prone areas ₋Corporate Network for Disaster Risk (CNDR) as government partner ₋Capacity building of local government and community and development of barangay level DRM Action Plan ₋Have been operationalized in 8 barangays, 3 cities, 1 province

Gaps in DRRM for Philippine SMEs  Lack of translation of national policy into local and sectoral plans ₋MSMED not referenced to DRRM  The DRRM plans operationalized primarily for search, rescue, evacuation, relief operations ₋Restoration of economic activities handled only in the medium to long term as part of the rehabilitation efforts  Absence of strategic programs to operationalize action plans for SMEs ₋No small business development centers to address disruption and needs ₋Absence or insufficient recovery funds for farm based and urban based small industries (loan and grant) ₋Protection of workers  Area BCM limited to pilot areas and to few committed LGUs  Need to develop/improve effective partnerships with key stakeholders for DRRM

Recommendations  Build key transport hubs that take into consideration extreme weather events  Developed strategic communications systems  Setting up of pre disaster agreements Dysfunction of public sector is expected effective networks or partnerships between national and local; public and private Adopt flexible regulations (e.g. labor, import/exports)  Support development of financial security instruments at the national level (e.g. catastrophic insurance) and organization level (e.g. micro insurance, business disaster fund)

Recommendations …….. (2)  Help build organization resilience Revised Magna Carta for SMEs and BMBEs and MSME Development Plan to incorporate DRRM for SME Scale up Area BCPs and practice disaster adaptability among SMEs  I ncorporate in labor policies executive management commitment to employees welfare in the event of disasters A concern of both business and government

Recommendations …….. (3)  Regional cooperation for supply chain resilience Continue to build partnerships with other multinational organizations inside and outside the APEC region ₋Information sharing ₋Promote regional resiliency assessment programs ₋Application of local and international learnings Undertake dialogues, capacity building activities and cross collaboration in resource and technology sharing e.g. hazard mapping, IT infrastructure

Philippine Institute for Development Studies Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas Service through policy research 13 WEBSITE: FACEBOOK: facebook.com/PIDS.PHfacebook.com/PIDS.PH TWITTER: twitter.com/PIDS_PHtwitter.com/PIDS_PH [ Thank you ]